After Brexit 2: The Social and Economic Model

In 1945 the post war settlement brought about the most profound re-structuring of the social model since the beginning of the industrial revolution. The well known manifestation of the Welfare State is still with us, although fraying at the edges. But then the underlying principle was for the first time the notion that the standard of living and employment of what was  known as the working class, was the driver of public policy right across the spectrum. The industrial revolution had already ended the power of land over people.

Mines and factories meant the wealth began at the base of the economy, with the miner or factory worker gaining the first shilling of the new wealth which then floated upwards to the financial sector at the summit. This was and is the basis of an industrial economy. What changed in 1945 was the expectation that the workers would receive a larger and fairer share and that it was their welfare which took priority, since it was upon them that every other aspect of the functioning of modern civilized life depended. The state was seen to have a collective responsibility not only to defend the people from threat of attack and lawlessness, but also to make available healthcare, education, higher education and social welfare services free at the point of delivery. Additionally a vast programme of public housing was spread all across the land, into every town and village.

In order to pay for all this, taxes had to be raised. The cost of all the benefits and programmes, including the military, was calculated and taxes were then set at rates to deliver the required revenue. First came the service, then came the tax at a level to pay for it.

We have now reverted to a system in which the money is generated in the financial sector at the top of the economy and fed down to the base, which has to pay for it. Taxes are set at a level the government determines, the lower the better, and services, everything, the military, health, education, law enforcement, have to be cut down to a level the resultant revenue can cover. The money is finite but the demand expands, so the service gets into greater and greater difficulty.

The rich grow ever richer while the so called working class find the going tougher and tougher and themselves working harder and longer with less and less to spare. Old fashioned family life breaks down, youth crime rises, populism and intolerance flourish. Brexit, a national trauma equivalent to defeat in war without the death and destruction, is going to bring an end to this top down model, whether the Brexit is soft or hard.

If the Brexit is soft the change will be gradual and its effects will accumulate over time. But if Brexit is a crash out, the change will be sudden and dynamic. The people will once again be back in control. The social and economic revolution will be historic. The establishment will feel the chill wind of change and experience the doleful sight of its draining power for the first time in seventy odd years. It will also have to live with the realisation that it was the author of its own misfortune.

As the old saying goes, chickens do, in the end, come home to roost.